Section 109(a) of the Clean Air Act (CAA) requires the Environmental Protection Agency (EPA) Administrator to promulgate national ambient air quality standards (NAAQS) for each air pollutant for which "air quality criteria" have been issued under section 108. In 1997, Carol Browner, the Administrator of the EPA, revised the ozone and particulate matter NAAQS. Afterwards, her revised NAAQS were challenged in court. The District of Columbia Circuit found that section 109(b)(1), which instructs the EPA to set standards, delegated legislative power to the Administrator in contravention of the Federal Constitution because the court found that the EPA had interpreted the statute to provide no "intelligible principle" to guide the agency's exercise of authority. The court remanded the NAAQS to the EPA. The courts also held to its rule that the EPA could not consider implementation costs in setting the NAAQS. Additionally, the court rejected the EPA's position that the implementation provisions for ozone found in Part D, Subpart 2, of Title I of the CAA, were so tied to the existing ozone standard that the EPA lacked the power to revise the standard.

Question

Does section 109(b)(1) of the Clean Air Act unconstitutionally delegate legislative power to the Administrator of the Environmental Protection Agency? May the Administrator of the EPA consider the costs of implementation in setting national ambient air quality standards under section 109(b)(1)? Does the Court of Appeals have the jurisdiction to review the EPA's interpretation of Part D of Title I of the CAA, with respect to implementing the revised ozone NAAQS?

No, no, and yes. In an opinion delivered by Justice Antonin Scalia, the Court held that the CAA properly delegated legislative power to the EPA, but that the EPA could not consider implementation costs in setting primary and secondary NAAQS. Moreover, the Court held that the Court of Appeals has jurisdiction to review the EPA's interpretation of Part D of Title I of the CAA related to the implementation of the revised ozone NAAQS; however, the EPA's interpretation of Part D was unreasonable.

There are two principal issues in this first case and, with the Court's leave, I'll address each in turn.

First, the Clean Air Act does not violate the nondelegation doctrine.

The Act prescribes the following: EPA must set national ambient air quality standards for a limited set of ubiquitous pollutants

The standards must be requisite to protect public health with an adequate margin of safety.

They must be based on criteria that reflect the latest scientific knowledge about the identifiable effects of the pollutant in the ambient air, and the administrator must consult an independent body of scientific experts and explain any significant departure from its recommendations.

For 30 years, successive administrators have applied the Act's terms consistently.

Requisite means sufficient, but not more than necessary to protect public health with an adequate margin of safety.

Public health addresses not all biological effects, and not even all medical effects, but only those adverse health effects that threaten populations.

And identifiable effects means those that are shown to exist not hypothesized.

The Court of Appeals...

Justice Kennedy: Did those effects have to be medically significant?

Mr. Waxman: They do; that is, the legislative history... says that they must be adverse, which the administrator and the Court of Appeals means medically significant.

Now, they have to be also medically significant to a sufficient population to constitute a public health effect.

The Court of Appeals held that the Constitution requires more, specifically the articulation of what it called a determinate criterion to govern the setting of the precise standard for each pollutant.

That is contrary to this Court's precedents which require that the Court articulate only an intelligible principle or, as the Court has otherwise put it, that the Court delineate the general policy, the public agency that is to accomplish it, and the boundaries of the delegated authority.

Justice O'Connor: And in simplest terms, what is the intelligible principle here?

Mr. Waxman: I believe I can say it in one sentence, Justice O'Connor.

Justice O'Connor: Good.

Okay.

Mr. Waxman: For a discrete set of pollutants and based on published air quality criteria that reflect the latest scientific knowledge, EPA must establish uniform national standards at a level that is requisite to protect public health from the adverse effects of the pollutant in the ambient air.

Now that, in our view, means that Congress has made the fundamental policy choices, and it is also articulated both substantive and procedural constraints on EPA's application of the specified standard.

The Constitution simply does not require more.

There is a second issue in the case, if I can outline what our position is.

Justice Scalia: Before you get off the first issue, you say it's easy to say, but, but, but what does requisite to protect public health consist of?

I mean, suppose, you know, the scientific evidence indicates that there is some risk beyond... below a certain level of pollutant in the air, but that risk has not been... the extent of that risk has not been scientifically determined.

Now, what is requisite to protect the public health?

Everything above zero risk?

Mr. Waxman: No.

Absolutely not.

And let me answer your direct question first, and if I can and if it would be helpful to the Court, quickly outline the steps, the serial steps, that the Agency must go through every time the administrator has to modify it.

Justice Scalia: Well, before we get to the steps, I mean, I don't think that an accumulation of procedures is going to make... is going to create a criterion that doesn't otherwise exist.

What is the criterion?

How do you decide how much risk is too much risk, or is that just up to the Agency?

Mr. Waxman: The Agency looks first based on the criteria documents at the identifiable effects.

Those are effects that science has identified will happen to people not hypothesized risks about what might happen.

That's number one.

Justice Scalia: Okay.

Mr. Waxman: Number two, it then looks at whether those demonstrated effects rise to the level of medical significance, not whether they are... there is some effect on the biology of a cell, but whether it rises with respect to any person to the level at which a physician applying in this case the standards of the American Thoracic Society would determine that that person requires treatment, that that person, if you will, is ill or manifesting a significant medical symptom.

Justice Scalia: That's easy.

You are talking about demonstrated effects, but my question went to those areas in which we don't know what the effects are.

Mr. Waxman: Well...

Justice Scalia: There is a risk that there may be some effects, but we do not know what they are.

What is requisite to protect the public health?

Has Congress made clear what's requisite?

Mr. Waxman: Well, requisite has been defined by the Agency, and it's supported both by the legislative history and the D.C. Circuit, to mean sufficient, but not more than necessary.

That is, the Congress could not have been clearer that zero risk or background levels of a pollutant, that is levels that exist in the ambient air without man-made activity, is not what the administrator is aiming for or what the Act is designed to protect.

Justice Scalia: Okay.

Justice Souter: Then what is it?

Justice Scalia: It's something above zero, but what is it to decide whether the risk is too much risk?

Mr. Waxman: Well, perhaps I... if I may, perhaps I can, to answer your question by reference to either or both of the two pollutants that are at issue here.

With respect to particulate matter, for example, there was a preexisting standard that was set in 1987.

The Agency pursuant to the Act's requirements that the standards be reviewed every five years in light of the latest scientific knowledge went back and collected all of the medical and scientific study and prepared them in a criteria document, which is a multivolume set that is reviewed by CASAC, the independent advisory committee, which agreed that it was what it called the best ever compilation of the health effects of small particulate matter on public health.

The EPA then created a... what is called a staff paper.

The staff paper distills the science and organizes the data in a series of recommendations.

That, too, was reviewed by CASAC, which agreed that the ranges of concentrations... and this I think is what you're getting to... provided the appropriate parameters for the administrator's decision.

Now, with respect to particulate matter, the staff recommended, and CASAC agreed, that it was important to separately measure particulate, fine particulate matter; that is, matter that is equal to or less than 25 micrograms per cubic meter.

And if the staff with CASAC's approval set both the upper bound and the lower bound for the administrator's decision based on what the science revealed.

Justice O'Connor: May I ask you a question right there about the CASAC reviews, so called, the scientific committee.

I thought the statute required that committee to advise the EPA of any adverse public health, welfare, social, economic, or energy effects which may result from various strategies for attainment and maintenance of the national standards.

I mean, the statute does require the scientific committee to look at all those things and to report it to the EPA.

Now, why would Congress want that advice on economic and energy effects if Congress didn't want the EPA to consider those in setting the standards?

Mr. Waxman: Well, a couple of reasons, Justice O'Connor.

Chief Justice Rehnquist: Okay.

Mr. Waxman: First of all, as I think we'll probably address in some detail in the next hour, the EPA uses costs and feasibility standards in many, many of the things that it does, and it uses the information, this information that CASAC provides for that purpose.

For example, in all... the Act essentially creates a two-part process.

The first part is the setting of these national standards that set a floor for ambient air across the whole country and do not apply of their own force to any source of polluting, whether it's me driving my car or the utility plant that generates my power.

The second part of the Act is implementation; that is, how do you go about achieving these standards, and the states and EPA have vast authority and discretion to determine how that's done, and costs and other implementation factors, like technological constraints, are used at that point to determine what's reasonable.

This Court in Union Electric in 1976 pointed out that costs and technological considerations are amply used in the implementation process, so long as they don't avoid it.

Justice O'Connor: But in your view in looking at the standards governing EPA's setting of these national ambient air quality standards, you think that the EPA may not consider any of these economic or cost factors...

Mr. Waxman: Yes, since...

Justice O'Connor: as part of its required consideration of factors in setting?

Mr. Waxman: The legislative history and the text of the '70 Act are absolutely clear, and the EPA and the D.C. Circuit have been unanimous for 30 years that in the first part of the Clean Air Act, that is in setting the standards, the EPA is to consider only what the criteria documents reveal as the effects on public health and welfare of the pollutant in the air, and that costs are determined at the implementation phase by the states, by EPA, and by Congress.

Now, your point about CASAC, I think is very important to understand.

The CASAC was created in the 1977 amendments, and it was directed to do two things, and it's reflected at pages 112-A and 113-A of the appendix to our petition.

First, in 109(d)(2)(b) it is told to review both the criteria, which I was just discussing, and the national ambient air quality standard that EPA proposes in light of its scientific knowledge and what the criteria document reveals, and that is part of the NAAQS standard-setting process, and in this case the CASAC issued what they called closure letters, both with respect to the criteria documents on PM and ozone and with respect to the staff papers on particulate matter and ozone.

You have directed my attention to a separate section of the statute which says that such committees shall also, and then it lists a series of things that it should do.

That section, the section that relates to implementation technologies, et cetera relates to the implementation process of the standards.

The EP... for example, with respect to the PM and ozone standards, the CASAC has not yet issued any of that information because the Agency has not yet either begun to implement the eight-hour standard or the 2.5 standard, or indicated in notice and comment rulemaking how it will go about doing that.

The provision that you have questioned, Justice O'Connor, ties in perfectly with the provision in... also in Section 7409, I can't remember which subsection it is, which requires the EP... or maybe it's Section 7408.

In any event, I'll explain to you what I have in mind.

The 1970 Act, which required EPA to set national standards for the first time under the 1967 Act, they were set by the states.

In the 1967 Act, the states were told to set them by reference to two things that EPA's predecessor, HEW, would supply them.

The first was the criteria document accumulating the science data on health effects, which is the same thing we have today.

The second thing was a description of costs, pollution control technologies, feasibility, et cetera, and the '67 Act told the states that they were to conform their standards to both of those documents.

Now in 1970, the Congress did two very significant things.

First of all, it gave, it made the requirement to set standards mandatory and upon EPA, that is, on a national basis, so we would have a national floor.

Then the second thing which is really significant to your question is that it separated out the two things that EPA was collecting and providing.

And it provided that EPA was to still do the criteria documents, but that the NAAQS, the national standards, would be based on those criteria documents only, and the Act provides that at the time that the criteria documents are issued, EPA shall also provide to the states and to Congress information about costs, implementation, and available control technologies so that they can use that information in the standard-setting process that this Court reviewed in Union Electric.

Justice Breyer: I... were you finished?

Mr. Waxman: I can talk until interrupted, but I would prefer to answer questions, of course.

But the... if I look at their argument on the delegation part, the nondelegation part in light of what you have just said, it seems to me that they are saying that when we look at it, specifically the health part, what we are talking about with ozone is coughing outdoor children.

And if we look at coughing outdoor children we see with .09 in the air, approximately .9 of 1 percent of all the coughing outdoor children will cough and it will hurt.

And if we go to .08, we get .6 of 1 percent and if we go to .07, we get .3 of 1 percent.

See, it's a line they draw between points.

9, 6, 3.

And they say there is no way to draw, nowhere to stop on that line.

Absolutely not.

Once you take all costs and these other things out of it, why are you protecting the .6 and not the .3?

Why the .3, not the .9?

That's, I think, what I take it is their main claim on the nondelegation point and so I would like to you respond to that directly.

Mr. Waxman: I do believe it is their main point, and it is... it fundamentally misconceives both what the Act requires and what every administrator since 1970 has done.

As I was saying before, when the administrator gets the decision, it gets a staff report validated by CASAC that shows the upper bound and lower bound of where a standard should be set based on the application to the latest scientific knowledge of the standard requisite to protect public health, and in this case, you gave the ozone standard, the standard was at the upper level .09 parts per million over an eight-hour period and at the lower level, .07.

Now, the question about why the administrator chose one number within that range is, of course, the question that the Court of Appeals under Section 307(b)(1) to which it will apply the arbitrary and capricious not in accordance with law standard that it has not yet done in this case, but I can articulate for you why both why no one thought the range should be below .07, that is regulating down to zero risk, and why the administrator chose .07 versus .08.

I'll start with the second first to make sure that I get to the salient point.

.07 was, and this is reflected in the Federal Register notice promulgating the rule at pages 38863 to 38868.

.08 was chosen over .07 because one, there were no demonstrated adverse health effects below .08.

Two, the average responses, even at .08 were typically small or mild.

Three, the most certain effects at or below .08 were transient and reversible.

Four, .07 is at or slightly above peak background levels in some locations.

And five, not one single member of CASAC recommended .07 and in the legal challenges in the Court of Appeals to the standard, no party has challenged the administrator's decision not to go to .07.

.07 was viewed by CASAC and the EPA staff as within the lower range because with respect to two of the six testable health effects or end points or lung function, that is, the ability to exhale, the volume you exhale in one second and symptoms, it was possible to extrapolate from studies done at and above .08 to levels all the way down to zero just by using an arithmetic extrapolation.

Justice Breyer: Well, fine.

Justice Scalia: I mean, I understand what you are saying, but it still leaves open the question, why aren't transient health effects health effects?

I mean, so it's less coughing, and it doesn't hurt as much.

Why do you say that that should be ignored?

Mr. Waxman: There may be certain...

Justice Scalia: And as for CASAC and the parties not favoring going below what you finally picked, I mean, that can be explained because they, unlike, unlike EPA, may have been taking economic effects into account.

You know, if it required closing down the entire, the entire steel industry, for example.

Mr. Waxman: Justice Scalia, there is no evidence in the record and no basis for an assertion that either CASAC or the EPA or the administrator have done what they have said the law does not permit them to do.

Mr. Waxman: When there is an observed symptomatic... as I said, there are six different health effects that are measured, and these are reflected in the staff papers.

They range in level from very serious to potentially not serious at all.

The first two are mortality and emergency room hospital admissions.

The middle two are: is there inflammation in the lungs, and do the lungs manifest an unnatural responsiveness to pathogens or infection, and the two smaller ones which I addressed as to which there is data below .08 are, does it limit the amount of volume you can expel

Justice Scalia: But all you are telling me, General, is that... is that there are... there are reasons why one would pick the higher levels and not pick the lower levels.

It makes more sense to pick the higher levels, but you still haven't given me a criterion of where you stop.

Inflammation in the lungs for... a hospital admission may reflect a transient effect, but the administrator since 1970 has viewed that as by definition adverse.

Justice Scalia: Is that the principle?

Then one of the principles that EPA has applied and can derive from this statute is that transient health effects are not to be taken into account.

Mr. Waxman: No, I may have misspoken.

But there are... if you are... EPA concludes that if epidemiological studies show that you are required to go to the emergency room, they deem that to be an adverse health effect.

That is, a medically significant health effect.

What the administrator does when she gets the data within the range is to make a judgment.

The statute requires her to make a judgment within that range by reference to three factors.

She looks first, Justice Scalia, at the nature and severity of the health effects.

A cough is not like a death, obviously.

She looks at...

Justice Scalia: So coughs don't count?

Mr. Waxman: Coughs may count.

Justice Scalia: Is that a... I'm looking for some criterion I can glom on to and say this is the standard.

Coughs don't count or transient effects don't count.

Mr. Waxman: The criterion...

Justice Scalia: Is there anything that doesn't count?

Mr. Waxman: The criterion... nothing that... anything that does not rise to the level of a medically significant health effect does not count.

Justice Scalia: That's circular.

What is a medically significant health effect?

Is a transient cough a medically significant health effect?

Mr. Waxman: As I explained earlier and as the Agency has explained and the D.C. Circuit has explained, it is a health effect that rises to the level at which a medical professional would deem it to be a concern that should be treated.

In this case, with respect to pulmonary effects, the Agency has always applied the standards of the American Thoracic Society.

I understand, I do understand the question.

You are asking for a determinant criterion, but this... this Court's precedents have not and cannot require an agency with respect to an area where there are many different pollutants, many different kinds of health effects, many different kinds of health effects and many different kinds of science and scientific uncertainty to provide that criterion.

She exercises her judgment and explains in the record in detail why she made the choice within the range provided her that she did, and for 20 years, the D.C. Circuit has had no problem applying arbitrary and capricious review to that.

Justice Scalia: She hasn't said why.

She said these things are worse, and we are banning them.

These things are not so bad, and we are not going to ban them.

But you could have drawn the line anywhere and said the same thing.

You could have gone up from, you know, 0.8 to 1.0 and said the same thing.

The things above here are very bad.

The things below here are not so bad.

Mr. Waxman: Justice...

Justice Scalia: I want a criterion for why she drew the line at 0.8.

Now maybe, maybe you don't need it for the constitutional point.

Maybe Congress can leave it to her, you know, to pick a reasonable point.

But gee, she has to say the basis on which she picked the reasonable point, at least for the arbitrary or capricious point, don't you think?

Mr. Waxman: Of course.

For the arbitrary and capricious review, she has to explain why she made the decision she made, given what the scientific data showed, what the legal factors are, what the... and that's test...

Justice Breyer: Is that an issue before us?

Mr. Waxman: No, it's not.

Justice Souter: Okay.

So I mean, your... your position, as I understand it, is that... that this determinant point is not necessary to satisfy the delegation doctrine, and the... and as you have just said, the question of reasonableness or capriciousness is not before us because it was never reached by the court below.

Mr. Waxman: That is correct.

May I reserve?

May I reserve the balance of my time?

Argument of Edward W. Warren

Chief Justice Rehnquist: Yes, you may, General Waxman.

Mr. Warren, we'll hear from you.

Mr. Warren: Mr. Chief Justice, may it please the Court:

From what you have already heard this morning, it simply cannot be true that Congress intended for the administrator to make decisions which would cost nearly $50 billion annually by 2010, when the administrator herself frankly admits, and I'm quoting, that she followed no generalized paradigm in making these decisions.

Nor could Congress have intended for the administrator to regulate ozone and particulate matter by controlling combustion emissions from every automobile, factory, and commercial activity nationwide when again using her words, she never determined what risk is acceptable through quantification or any other metric, any other metric.

This Court's decisions do not lightly presume that Congress delegated questions of such great economic and political significance to an administrative agency, nor as this Court said in Benzene, in the Benzene decision, do they allow an agency like EPA to regulate broadly across the entire economy without determining what risks are acceptable or unacceptable in an everyday common sense manner.

Justice Souter: Can you explain, because this goes to the heart of, I think, of our understanding of your case, why your argument relates to delegation as opposed to the arbitrary and capricious stand, the point at which we ended up with... with your brother.

Mr. Warren: Yes, Justice Souter.

Because the prerequisite, the logically antecedent question for arbitrary and capricious review is an intelligible principle.

This Court has for 70 years said there must be an intelligible, substantive principle against which the rulemaking can be conducted, expert advice can be given, and judicial review can take place.

Justice Souter: True, but we're living under a regime in which things like just and reasonable and public convenience and necessity pass muster, and so it's not clear to me why the delegation here, in light of those examples, is wrong, as distinct from the argument that what the administrator has done does not satisfy the arbitrary and capricious standard.

Mr. Warren: Let meke one thing absolutely clear from the outset... it should be clear from our briefs.

And that is that we are not saying that this statute does not provide an intelligible principle, what we are saying...

Justice Souter: Isn't that the end of the delegation issue?

Mr. Warren: No it's really not, because the Court of Appeals was confronted with an interpretation of the statute from the Lead Industries case and the cases that followed on, which gave rise to the delegation problem.

And so it is true, I think, Justice Souter, to respond to your question, I do, just like General Waxman had to, I have to refer to the statute in talking about the intelligible principle and I will do so this morning in my discussion.

Justice Ginsburg: But your defending, Mr. Warren, are you not, a decision that said that said there is no intelligible principle in this statute.

To get one, someone has to make it up, either the Court or the Agency.

Mr. Warren: Justice...

Justice Ginsburg: What is the intelligible principle in the statute.

Surely it's not in the statute that there must be a cost/ benefit analysis.

Mr. Warren: If I may.

First, we are saying that it is the Lead Industries line of cases that created the delegation problem here.

We do argue that there is an intelligible principle in this statute that derives from public health, from requisite to protect the public health.

There are a number of other words in the statute which I may get time to deal with in my second argument but I want to focus right now on public health, because I think it brings clearly into focus what is missing from General Waxman's argument.

General Waxman referred to medically significant risks and talked about the American Thoracic Society.

He's talking as if the statute said we want to protect personal health.

That's not what the statute says.

What the statute says is we want to protect public health, and that difference is terribly significant because let me explain what happened in 1970.

The Senate bill said we want to set national standards which will protect the health of persons, a term that was interchangeable in the previous Act with health of any persons.

The House had a bill that said, no, we want to protect public health.

Public health was a word that had been used consistently since 1955 in the statute and connoted just what, as we say in our briefs, public health does connote, which is a comprehensive cost included evaluation in order to reduce sickness and to improve longevity of the population.

What the conference committee did is it accepted the House version, public health, which has a meaning which I'm going to be discussing further this morning.

And what Mr. Waxman or what General Waxman has been doing this morning is referring to legislative history from the Senate bill from which he... not just he, I don't want to blame Mr. Waxman... but EPA has derived this notion of medically significant risks.

Justice Ginsburg: And you've derived the notion of cost from public health.

I mean, that is as obvious or not obvious, one or the other, and this regime has been going on... Lead Industries was 1980, and this debate has been going on and yet when Congress made adjustments, it always made adjustments on the implementation end.

It never did what could have been, what could have ended this debate very swiftly.

Mr. Warren: Let me start with the latter part of your question and then kind of trip back to some of the things you said previously.

First of all, this is... the Congress has taken no action with respect to Section 109(b).

We all know that.

There is not going to be any change by inaction by the Congress.

I think surely that's common ground for everybody.

Justice Ginsburg: But there has been some action by Congress stretching out the time to achieve attainment.

Mr. Warren: But Congress has never, has never done anything to the central standard-setting provision, and it has never said anything which is different than what I'm saying about public health.

And I think for a very good reason.

Let me just kind of put those cases in context.

I know that you had some role because you were in the Court of Appeals at the time.

But Lead Industries involved a not very ubiquitous pollutant.

Lead in the ambient air principally resulted from gasoline emissions which had already been regulated by EPA, and that case was tried very much as a technological feasibility case, not as a public health case such as we are talking about here.

There is no doubt that the standards there protected public health in the very sense that I'm talking about in my argument this morning.

The problem with the decisions following Lead Industries, it's not that Lead Industries on those facts concerning the contentions being made in that case was wrong.

It is rather that the Court of Appeals then conflated the idea of technological feasibility with the question... separate question... of whether cost and other kinds of countervailing considerations can be taken into account in setting the standards in the first instance.

Now, with respect... and let me go ahead and say here we are with the two most ubiquitous pollutants, ozone and particulate matter, where the regulatory scheme requires everything I said in my first moments of argument this morning where we are in the last mile, and all of a sudden the question which has been present all along in public health is now front and center.

Now, we talk about the implementation process here.

I think two things are significant about what General Waxman had to say about this... that this morning.

First of all, I think he is conceding logically that costs must play a role or else he wouldn't be making this argument about the implementation phase.

But he is misstating with all due respect what this Court's Union Electric decision said.

What the Union Electric decision says is that the standards are set by EPA and they cannot be changed when EPA approves a state implementation plan.

Those standards are set and whether they protect public health or not, they can't be changed in the implementation process.

Justice Souter: But I think it is the case, number one, that the implementation process, may, and I presume does, consider economics when it determines the period of time in which compliance must be reached, and of course, Congress may do that.

And so that I think it's wrong on anybody's premises to say that economics is excluded from the process.

Now, it may very well be that if the cost is so horrendous, that there is... that there is no implementation period in which the cost would not be very great on an annual basis.

In 20 years, it's still going to be enormously costly.

I think the Solicitor General's response to that, if I understand the briefs, is that, in effect, is the decision that Congress reserved to itself by periodically taking up the question of revising implementation standards as it has, as we are going to get to, I guess, in the next case.

Mr. Warren: Justice Souter, if I may, this Court's decisions very clearly distinguish between feasibility analysis and cost/ benefit analysis.

Now, I will say, recognizing you said the opposite, cost in the sense of cost/ benefit analysis can never be taken into account in the implementation process at all.

Those standards are set, and they can't be modified in the implementation.

Justice Stevens: Right.

Justice Souter: Let's assume, let's assume that is so, and I don't believe the Solicitor General will agree, but let's assume it is so.

Then I think the government's answer would be Congress has set out the scheme which in effect reserves to Congress the right to revise implementation, and that's the point at which economics definitely will be given its place.

But even on your kind of worst case argument, I think the government's response is that's what Congress wanted, and Congress has reserved to itself the power to interfere in the process.

Mr. Warren: First of all, I'm going to be talking about why that isn't what Congress wanted, but let me continue on the implementation part of this.

What the Union Electric case says is that only the states can even look at these questions at implementation, and then they can only look at them and say who's going to bear the burden of the standards that are already set by EPA.

I call it triage, but, I mean, I think you get the idea.

It's essentially who's going to bear the burden.

Justice Souter: And they can say how long their time, how much time will be allowed for that burden to be borne, which has an obvious economic consequence.

Mr. Warren: But even that's not true.

Those standards have to be met by the deadlines established by Congress.

There is only... this kind of consideration that you are wishing were there isn't there.

Justice Souter: Then the argument is that Congress has reserved something and it shouldn't have reserved it.

It should have given the power in the first instance to the administrator.

Mr. Warren: Now, but that... first of all, I would think that it would be common ground that we don't construe statutes on the assumption that Congress will change them, and that we don't construe the words, because it seems to me when we come to the words here, we come back to what really went on.

Justice Souter: But the words that you are ultimately, the word that you are depending on is the term public health as distinct from individual health.

You'll say, you say that imports.

That implies an economic criterion.

And I have to say even as a threshold matter, I don't know why that implies an economic criterion in some different way than a reference to or a different degree than a reference to individual health would do.

Mr. Warren: Well, I think, the distinction, Your Honor, is very much like the idea of managed care.

I mean, what we are talking about is a world of limited resources, and the decision is being made on the population as a whole.

Justice Scalia: There are other provisions in this very statute...

Mr. Warren: Right.

Justice Scalia: that use the term public health, and then add to the term public health the impact upon the economy.

For example, Section 76.12, which commissions a study to analyze the impact of this chapter on the public health, the economy and the environment.

Mr. Warren: And...

Justice Scalia: You're saying they didn't really have to say economy.

Mr. Warren: No.

I'm saying that those three terms, public health, environment, and the economy, overlap and interrelate and so that when... when, for example, Congress was asking for advice about the effects on the environment, they were not excluding effects on public health and so, too, when they were asking for effects on public health, they were not excluding effects on the economy.

Those terms are obviously set up in such a way that the advice... they are not mutually exclusive...

Justice Scalia: There are several other places in the statute where... where public health is added or, or, or referred to separately from economic effects.

The second problem I have, and I would like you to address that if you can is, I don't see how it helps your delegation problem to simply add the economy to the ineffable pot of things that the administrator is supposed to consider.

I mean, I was pressing the Solicitor General on, you know, is, is a... is a cough too much.

I don't know if a cough is too much.

I suppose, you know, it's a hard call, but does it make it easier to say, well, you know, if you are going to stop a cough, you are going to... it's going to cost $1,000 a cough.

Well, I don't know.

Does that help you?

Is that a clear standard?

Mr. Warren: Yes.

Justice Scalia: Is $1,000 too much for a cough, or 2,000, 3,000?

Why does it give you a standard simply to add, add economic effects to the thing.

It still seems to me quite as...

Mr. Warren: We are not, we are not adding factors.

We are adding factors that countervail.

They're on the other side of the equation.

Could I...

Justice Scalia: But they're just as indeterminate.

It seems to me it's not enough to have other factors on the other side.

If you're going to bring more certainty to this statute, you need more determinative factors, not just more factors.

Mr. Warren: Justice Scalia, with all respect, I think that when you add countervailing factors, you narrow the range of outcomes.

Let me illustrate by just and reasonable rates which we talk about in our brief.

I think you'd have a great big constitutional problem if you didn't take investor interests and consumer interests and weigh them one against the other.

That's what Hope Natural Gas says.

It upholds that delegation precisely because we...

Justice Breyer: But I don't see how it, just and reasonable rates.

The question that I asked before...

Mr. Warren: Yes.

Justice Breyer: which I think was trying to get your argument...

Mr. Warren: Yes.

Justice Breyer: All right.

I could ask the same question with just and reasonable rates.

I could ask the same question with picking out trucking routes or picking out airline routes.

I mean, why is this worse than those?

You just say there are interests on both sides, so... well, there's no way to... there's no scale in heaven or anything else, other than judgment, that tells us what the just and reasonable rate is in terms of return to an investor, and similarly there's nothing other than judgment that would tell you here how far down the health scale you go before it's not really required by public health.

Mr. Warren: Justice Breyer, the judgment is informed by having countervailing factors.

That's the point.

This is different because...

Justice Breyer: Then what you're saying is that if you have 50 countervailing factors you may get a more informed judgment.

I agree with you on that, but I now suffer from Justice Scalia's question.

That is, I agree with that.

I don't see how it's one wit more determinative whether you have 50 factors informing your judgment or one, or two.

Justice Scalia: You're saying that Congress can't give this to the EPA unless it holds the rein pretty tight.

I thought that's your argument.

Mr. Warren: No, I think... when you say hold the rein tight, what I'm saying is that public health necessarily conveys and connotes the kind of countervailing factors that I'm talking about.

That does not mean the agency lacks discretion.

That doesn't mean, just as Justice Breyer was suggesting, that the FPC, when it sets just and reasonable rates, is pinned down to 6 cents rather than 5 cents.

That's really not my argument at all.

I'm not arguing that we're going to get to a solution of a differential equation.

What I'm saying is that you have to have the competing factors.

Justice Souter: And the Government says the competing factors, the countervailing factors are identified, among other things, by looking to norms today about the need for treatment.

That's a countervailing factor.

Do you have to treat it, don't you have to treat it?

Is the effect transitory, is it nontransitory?

Those are all compared-to-what kind of analyses, and they're saying you get those compared-to-what kind of analyses without having to get into economics at the front end when you're setting the standard, so they say your own argument is met.

Mr. Warren: But with all due respect, they are bucking the whole regulatory process, because what they're talking about is characterizing a risk.

Science helps to characterize risks, I don't doubt that.

The question is, how do you manage risks?

When you're managing risks you've got to take into account countervailing factors, otherwise you're in the situation that the Court of Appeals, I think, pretty aptly described.

Justice Souter: Right, but they're saying that at the standard-setting stage the question is not risk management, the question is risk identification, and we identify the risks by bearing in mind these various countervailing factors.

We manage the risk at stage 2, at the implementation stage.

Mr. Warren: But with all respect, Your Honor, they are managing risks when they set those standards because the standards can't be changed in the implementation process.

I realize I'm just folding back on the argument I've made previously, but your...

Justice Stevens: Can I ask a clarifying question?

Mr. Warren: Yes.

Justice Stevens: Are you saying... I want to be sure I understand your argument... that although the terms, requisite to public... protect the public health are too vague and too standardless, it would be all right if it said, are requisite to protect the public health provided it doesn't cost too much?

Mr. Warren: No...

[Laughter]

I think my red light's on, but if I can respond to this...

[Laughter]

Justice Stevens: I think that's what you're saying.

Is that what you're...

Mr. Warren: No, that's not what I'm saying at all.

What I'm saying is that requisite to protect the public health itself, in this statutory context...

Justice O'Connor: Includes...

Justice Stevens: It's not provided it doesn't cost too much...

Mr. Warren: Yes.

Argument of Judith L. French

Chief Justice Rehnquist: Thank you, Mr. Warren.

Ms. French, we'll hear from you.

Mr. French: Thank you, Mr. Chief Justice, and may it please the Court:

EPA's promulgation of a revised ozone standard was unlawful because it conflicts with Congress' specific and comprehensive plan for ozone regulation found at subpart (2) of part (d) of the Clean Air Act.

In 1990, Congress rewrote the law that applies to ozone.

Congress rejected the old and failed one-size-fits-all approach to ozone attainment.

Congress implemented instead a comprehensive and unique scheme that combines realistic expectations with measures of progress.

EPA's position has changed repeatedly over the last few years, but there is no question the EPA intends to take us back to that failed approach.

For the states, that means a return to unrealistic deadlines, inflexible requirements, and certain failure.

We ask the Court to affirm the lower court's judgment that EPA may not implement a different standard.

Justice Ginsburg: May it declare one?

I mean, one part of this I thought was that the Congress has instructed EPA periodically to review these national ambient air quality standards and revise them based on more current information, so it seems that the obligation on EPA to review and revise is one clear instruction that Congress has given.

Mr. French: Not with respect to ozone, Your Honor.

We need to look at Section 181 of the Act.

The very first sentence of Section 181, which is the first section of subpart (2), states specifically that each area...

Chief Justice Rehnquist: Where do we find the section you're referring to?

Mr. French: That would be in the brief of respondents American Trucking in Case Number 99-1257, their red brief, at page 15-A.

Chief Justice Rehnquist: Thank you.

Mr. French: The first sentence of that section reads that each area designated nonattainment for ozone shall be classified according to table 1 that's provided there, and using... by operation of law, and using the design value for each area.

The second sentence tells us that the design value is calculated according to the methodology that EPA had in place most recently before November 15, 1990.

From those two sentences in table 1, we have a specific standard in place...

Justice Ginsburg: So you mean the 1990 standard has to last forever?

Mr. French: That's true, Your Honor.

Justice Ginsburg: To 2010, it's still the 1990 standard?

Mr. French: Yes, Your Honor.

Congress left no room for EPA to promulgate a different standard.

The section, Section 181 is...

Justice O'Connor: So you think Congress intended to prevent the EPA from enforcing new ozone national ambient air quality standards anywhere in the country?

Mr. French: For ozone, yes, Your Honor...

Justice O'Connor: For ozone.

Mr. French: that's exactly correct, and we make that argument based on the specific language of Section 181, in particular, table 1.

Justice O'Connor: Does that have the effect of reading subpart (1) sort of out of existence?

Mr. French: Not entirely, Your Honor.

However, there are specific limitations in subpart (1).

For instance, in Section 172 of the Act, that's the section that gives EPA its general authority to classify areas and to set specific attainment deadlines, Congress stated in the 1990 amendments that those paragraphs giving EPA that general authority do not apply where those classifications and attainment deadlines have been set in other parts of the Act.

Justice Scalia: Then Congress...

Well, section (1) will continue to apply for other pollutants...

Mr. French: Exactly right, Your Honor.

Justice Scalia: that are not contained in table 1.

Mr. French: That's exactly right, Your Honor.

Justice Souter: And it would apply as to, what is it, the secondary standards...

Mr. French: No...

Justice Souter: the welfare standards, wouldn't it?

Mr. French: No, Your Honor, actually.

Our argument is that subpart (2) would also apply to secondary...

Justice Souter: It covers welfare as well as health?

Mr. French: Yes, and it would also...

Justice Breyer: If Congress wanted to say you can't pass any new tougher ozone standard, why didn't it just say it, instead of having a provision in there that says you should revise it every 5 years?

Mr. French: Your Honor is correct that EPA... I'm sorry, that Congress could have put it in the negative, that thou shalt not revise the standard.

However, they put it in the positive.

Justice Scalia: They didn't say that you shall revise the ozone standard every 5 years, did they?

Mr. French: No, Your Honor, they did not.

Justice Scalia: They said, you shall revise standards every 5 years, and that's their general provision.

Then they had a more specific provision dealing with ozone which said, this is going to be the standard.

Mr. French: Exactly right, Your Honor, and that more specific language came later in time.

We have the language of Section 181, which gives us a specific standard, gives specific classifications or gives specific deadlines.

This is a deal that Congress brokered in 1990 with the states and with EPA.

What it gives to us and gave to EPA at the time was certainty, planning certainty, after 20 years of failure.

Twenty years...

Justice Breyer: Was there any legislative history which is where they all got up on the floor even which would be significant to me, not to everyone, where they said and now this means, this means that the EPA has no more power to revise the standards.

Mr. French: There are references, Your Honor, to the number of other kinds of revisions that Congress considered.

Congress considered other bills that would have given EPA authority to revise the standard within a certain period of time following the '90 amendments.

There were other bills that would have given EPA, for instance, the authority to change the averaging time from say a six-hour standard to a 12-hour standard.

What Congress put into place was the specific standard we find in subpart (2) which gives us the one-hour standard using the design value that was in place at the time of the '90 amendments.

Congress did so and it made sense to do so because of the failure of the 20 years before 1990.

We'd had the '70 amendments, or the '70 Act, the 1977 amendments and then leading to the '90 amendments.

Attainment areas across... there were nonattainment areas across the country and Congress got it right this time, after 20 years of failure, we've had 10 years of success.

The state of Ohio is a good example of that.

Ten years ago today, the state of Ohio ranked third among the 50 states for areas that were out of attainment for ozone.

Chief Justice Rehnquist: That's third from the bottom, basically, from a health point of view.

Mr. French: From meeting the standard point of view, yes, Your Honor.

We had the most, we are the third highest member of areas out of attainment.

Today the entire state of Ohio, as well as the states of Michigan and West Virginia, are completely in attainment and that is only after following Congress' scheme for ozone attainment, not the one-size-fits-all approach that was in effect until 1990.

Again, the reason for the '90 amendments was the failure that came before the '90 amendments.

Justice Ginsburg: Do you mean now, they're home free forever.

You said Ohio is now attainment area.

Mr. French: That's correct, Your Honor.

Justice Ginsburg: So that's it for ozone.

Mr. French: That's it in terms of just having to meet the standard that is currently in place, but even when areas are in attainment, Your Honor, they are not without regulation.

There are certainly emission requirements to be met, a permitting review that happens on a continual basis, so the states, the areas that are in attainment are not without regulation to make sure that we continue to maintain that specific standard.

Justice O'Connor: Judge Tatel had a different view of how these two subparts worked, did he not?

Mr. French: He did, Your Honor, and what he suggested was that once an area met the standard, that then EPA could change the standard for that specific area.

That doesn't work with subpart (2) for three reasons.

The first is that subpart (2) is a comprehensive scheme that applies nationwide.

The second is that Section 172 of the Act takes away EPA's general authority, not just general authority with the 1-hour standard, but its general authority for classifying areas and for setting deadlines.

The final reason is that subpart (2) itself in Section 181 refers to areas that are currently in attainment but may fall out of attainment.

There are specific provisions in place that would apply subpart (2), and specifically table 1, to those areas.

There is simply no room left, whether now, in the future, until Congress acts to change the specific standard.

We've got an extraordinary case here where Congress balanced the interests, many of the interests that we're talking about this morning with respect to ozone.

Congress got it right, and we're asking the Court to simply affirm the lower court's judgment that EPA may not implement the standard, but we are offering as an alternative basis that EPA cannot implement the standard because Congress gave it no authority to revise the standard in the first instance.

Again, we need to look only specifically at Section 181, at the very first sentences, the sentence that provides that each area designated nonattainment for ozone shall be classified in accordance with table 1.

I would be remiss if I didn't state here that we won below.

A majority of the D.C. Circuit agreed the EPA had no enforcement authority to enforce a different standard.

We are asking the Court to go one step further on alternative grounds, and that is that EPA cannot implement a different standard because it may not revise the standard.

EPA's argument is that they cannot implement the standard because it becomes unworkable.

It's unworkable because Congress never anticipated that the 1-hour standard would be changed without congressional change.

Just as the states and EPA, I may remind the Court that EP... this was EPA's bill.

This was the President's bill before Congress asking for certainty, asking for a specific standard, a specific set of classifications, and specific deadlines.

Justice Scalia: Well, never mind...

Justice Breyer: Thank you, Ms. French.

Mr. French: I see that my time is up.

Thank you.

General Waxman, you have 3 minutes remaining.

Rebuttal of General Seth P. Waxman

Mr. Waxman: Mr. Chief Justice, and may it please the Court:

The state of Ohio is asking this Court to rule that the administrator may not revise national ambient air quality standards for ozone, and that even if she can revise them, that she cannot implement them either for primary or secondary standards.

The District of Columbia Circuit held, in a judgment that no one petitioned from, that the clear language of the statute requires EPA to revise and, as appropriate, promulgate new standards for ozone, and that nothing in Section 181 in any respect impairs her ability to enforce the secondary standard, which is identical, and we think, therefore, that those questions are not properly before the Court.

What is before the Court is the question of whether, having resolved the legal question before it, which is the challenge to EPA's authority to revise and provide a new standard, the Court of Appeals acted properly in going beyond that and opining, based on some preamble language, to the new rule that EPA promulgated, that EPA could either not implement the new primary standard, or implement it only in conformity with subpart (2), which are the specific implementation provisions that Congress enacted in 1990 for the 1-hour ozone standard.

We think... we have two submissions.

First, there was... the Court of Appeals did not properly address the issue of how EPA will implement the new standard that it said it had authority to set, because EPA has not undertaken any final agency action to do so, and the time for doing so has not yet come.

Second of all, the question is, because it hasn't engaged in the notice and comment rulemaking about how to implement the 8-hour standard, the EPA has not... the Court of Appeals decision is perforce phrased in terms of such a high level of abstraction that not even any of the respondents can agree what the Court of Appeals meant when it said in its third try at this that EPA may implement the 8-hour standard only in conformity with subpart (2), and therefore we think that the Court of Appeals should not have reached this issue.

The administrator will engage in notice and comment rulemaking specifying how the Act is to be implemented at the time that she promulgates the area designations that the states have provided to her and sets the schedule for what are called state implementation plans, and at that point she will have issued a rule and undertaken an action supported by an explanation that this, or the Court of Appeals could review.

Chief Justice Rehnquist: We'll hear argument next in a companion case, number

Chief Justice Rehnquist: Whereabouts on page 6-A and 7-A are you reading from?

Mr. Warren: --I'm now on page 7-A and I'm looking at the judicial review provision which is Section 307(d)(3)(c).

Chief Justice Rehnquist: Where it starts the major legal--

Mr. Warren: It's at the top of the... yes, yes.

In other words, I'm reading about the statement that the administrator must provide, which is the next sentence, and it says it must set forth the pertinent findings, recommendations and comments and so forth, and if her proposal, and you'll notice it says Section 109(d), that's 7409(d) is all of Section 109(d), it's not excluding out the parts that General Waxman would exclude out.

What it says is that she has to say where she differs with the CASAC, and where she agrees with the CASAC, and so forth.

So this information that Justice O'Connor, you referred to in your question, is very much part of the standard setting process.

It's very much part of what the administrator has to say when she promulgates a standard, and it's very much part of the judicial review provision.

Now, if I can return to the core provisions of the statute.

Requisite to protect the public health with an adequate margin of safety.

Now, I'm going to talk mostly about public health this morning, but that doesn't mean that there aren't other words that you should pay attention to, and other provisions in Section 108 and 109.

I just would like to focus on public health because I think it's so doggone central.

Now, what does it mean to protect the public health?

Now, public health is not defined in the statute.

We all agree on that.

It has to take on its natural and ordinary meaning under this Court's decisions.

Chief Justice Rehnquist: --Well, but the administrator surely has some latitude in defining it since it isn't defined in the statute.

Mr. Warren: Well, Mr. Chief Justice, I would agree with that with this point in mind.

If the administrator defines public health so that it excludes all countervailing factors, what you are doing is handing over to the administrator a decision of far, far-reaching economic and political significance, and under this Court's decisions, the MCI line of cases, the Court just doesn't presume those kinds of delegations lightly, so my point would be, of course, the administrator in this provision and others has discretion, but it doesn't have discretion--

Justice Stevens: May I ask on your countervailing factors, are you referring to countervailing health factors, as well as countervailing economic factors?

Mr. Warren: --I am indeed.

Justice Stevens: And do you interpret what she has done is to exclude all countervailing health factors?

Mr. Warren: Yes.

That's what the lead industry's line of cases says, and really that's what the Court of Appeals said too.

Justice Stevens: You think lead industry holds that they may not consider countervailing health factors, as opposed to countervailing economic factors?

Mr. Warren: The Court of Appeals in this case, and this involves the protective effect and ground level ozone, held that the statute required her to consider that.

But, but what I'm saying about public health, and I want to, what I'm saying about public health is--

Justice Scalia: Does she acknowledge that, before you go on?

Mr. Warren: --Yes.

She does.

Justice Scalia: Does she acknowledge that you have to consider the effect of particulates in our ozone in reducing ultraviolet rays, for example?

Mr. Warren: Well, let's put it this way.

She didn't sake cert on that issue, so I think she, she has acquiesced in that point.

Justice Breyer: Well, then if that's so, maybe that ends it because why isn't it a perfectly good, public health must mean basically public health.

Not the cost of obtaining public health.

Basically.

I mean just saying basically in the ordinary case, and then, of course, you could have some unusual cases where in fact what people like to say is we are going to go back to the stone age, which was very unhealthy for people, so, that if in fact the administrator has the authority, not necessarily the requirement, to take into account the health effects of either the, you know, we've seen the skin cancer referred to a lot in the briefs, and I guess if you really destroyed the economy, that would have adverse health effects.

I don't know you're... I don't know if the other side agrees on that.

But if I'm thinking that the administrator has the authority, not the requirement, in unusual cases in a technology-forcing statute to take into account the possibility that despite the technology forcing, etcetera, you could hurt the public health, because we are going back to the stone age.

I mean, if that kind of reading of the statute, does that satisfy you?

Mr. Warren: No.

Justice Breyer: Alright.

Why isn't it, however, a correct reading, which isn't quite what they proposed, but--

Mr. Warren: --Well, first of all, they've not conceded the point that you're making but let me address it in terms of public health.

I call the Court's attention to footnote 1 of our blue brief that I was referring to again, because public health, as I think everybody knows today, is a discipline which examines health questions in terms of protecting the public with explicit reliance on cost/benefit considerations.

I mean, this is the way you achieve the most for the public, and that is by taking cost/benefit considerations into account.

Justice Scalia: But the provision you just, you just quoted to us at the beginning of your presentation here, which says that the committee has to advise the administrator of any adverse public health, welfare, social, economic, or energy effects, which may result from various strategies.

But you know, they take the pain to separate public health from economic.

Mr. Warren: But, but I think my answer to you, Justice Scalia, is the same here as it was with respect to Section 312.

Those, those things that are mentioned there obviously overlap.

I mean, they infect each other in both directions and it's so true, so is true of public health.

Let me say that I didn't make up this definition of public health.

Public health was defined most prominently by the head of the public health school at Yale, and his definition is the one you really see in all the dictionaries.

Justice Ginsburg: What about the definition the Congress gave?

It didn't give any?

Mr. Warren: It didn't give any.

That's significant.

And why did Congress--

Justice Ginsburg: And you think this was relying on this prestigious person at Yale, and not on the EPA?

Mr. Warren: --No what I really think it was relying on was the implicit definition of public health in the Act before 1970.

Let me focus in on exactly what happened again because I think it's very significant.

The Senate came up with a bill that would set national standards to protect the health of persons.

Now, that expression had a meaning in the previous Act.

It was the trigger for abatement actions.

But abatement actions, the trigger was only the beginning.

You then weighed against the... what's necessary to protect the public, to protect the health of persons.

You weighed against that equitable factors, and economic factors and the like.

The House, by contrast, used the term, we're going to set standards requisite to protect the public health.

That term had a meaning in the statute as well.

From 1955 on, Congress used the word public health.

It enlisted the public health service, which engages in exactly the kind of comparisons I'm talking about to help administer the statute and public health was the goal to be achieved when you weighed the health of persons against these other factors.

That's implicit also in the purpose of the statute.

I see... I use the purpose to reinforce what public health means, not in any other, in any other way, but it does very much reinforce it.

It's really what Justice Breyer was saying.

Is healthy people are wealthier, wealthy people are healthier.

There is always going to be an interaction between these things.

Justice Breyer: I'm not sure I was saying that, but they--

Mr. Warren: It's close.

It's close to what you said.

Justice Breyer: --I mean, what I don't see to be direct about it is how you import a cost/benefit analysis into this statute.

I mean, cost/benefit analysis is a formal discipline.

It's very complicated.

It's very time-consuming, and if you were going to have that formal discipline in this statute, why would they just use the words public health?

We're not talking about... we're talking about what Ben Franklin called prudential algebra.

Put one side of the column pros.

One side of the column cons.

We are looking at an analysis just like you see in the presidential executive order of this administration, or that which you see in the Unfunded Mandate Act.

What we're talking about is a common sense weighing of competing considerations in a systematic way.

That's all we're talking about.

The executive order, as I'm sure you know--

Justice Breyer: One difficulty, I guess would be you could put in certainly, I imagine, the economic considerations if perhaps... if they're related to health considerations, I can see how a person might do that where small risks are involved.

I could understand that.

How to do it.

What I don't really see is how you do that if the statute is technology-forcing.

I mean, because you wouldn't know really what the costs are that are being foreseen with the technology that doesn't yet exist.

It would be pretty hard to write that.

Mr. Warren: --Once again, with all due respect, we have a very detailed regulatory impact analysis here which does... EPA knows a lot about the costs of controlling these two pollutants because it's been controlling them for 30 years, so it knows how much it's going to cost to go that extra step and that extra step, and there is an evaluation of those costs in the regulatory impact analysis, so I don't think it's hard to get a handle on those costs.

I'm not saying that any answer on the costs or the benefits is precise.

The agency has a lot of discretion on that, but not to try, I think is ultimately going to defeat public health.

It's going to defeat the objectives of trying to achieve more good for the public, and that's what this statute's all about.

Justice Ginsburg: Mr. Warren, may I ask with respect to this add some kind of cost/benefit analysis, what kind we don't know.

You just mentioned Benjamin Franklin as one source of this.

It seems to me, to put it bluntly, that you would have on your scheme as a target for attack not only the public health as it has been conceived as something discrete from cost/benefit analysis, but what kind of cost/benefit analysis this should be.

Did EPA weigh the right factors.

It just seems to me that you are adding something that will create another morass, many more things that can be attacked than under the lead industry's regime.

Mr. Warren: Not at all, Justice Ginsburg.

Not at all.

What we are saying is that what the agency can't do in the name of public health is take countervailing factors off the table.

But in carrying out its responsibilities to achieve the public health, those factors are weighed on the pros and the cons, just as Ben Franklin was talking about, and we have a process which is... which it can be subjected to executive branch review, which is going to cut out a lot of the problems, to congressional review.

It facilitates what Congress had in mind.

Now, let me also go forward and say that this is--

Justice Ginsburg: If I knew what the "it" was.

I mean, you said this is not fancy cost/benefit analysis.

It's something... well, what is it exactly?

Mr. Warren: --What it is, is what every other health, safety and environmental agency does.

We don't have an executive order reviewing these decisions of EPA and OSHA, and NHTSA, and so forth, because every statute has been interpreted by a Court of Appeals the way this one has.

The norm is to do the kind of weighing and balancing I'm talking about.

Now, that's not to say that if a regulation passes executive branch review and gets by congressional oversight, that there won't be judicial review, but the agency is going to have a lot of discretion with respect to the weight of the evidence questions, questions about which costs can be quantified, which costs can't be quantified, how to quantify them, how to quantify the benefits.

All those questions are questions which would come up in the... in any subsequent review or could come up in any subsequent review, but the Agency's discretion is going to be honored.

Justice Scalia: Mr. Warren, I must say that to the extent you win this argument that you're making now, you sort of weaken your argument on, concerning the ability of EPA to issue revised ozone standards, because frankly, what makes it eminently plausible that Congress might have itself set a fixed table that can't be changed by EPA is the scary idea that if EPA can issue revised standards, God knows what it might issue.

It doesn't have to take into account anything but public health, and you know, it could go down to transient costs, and if that's what the scheme is, I can understand why Congress would say in Part II, no, look it, with ozone, it affects everything, it affects every industry.

We are going to, we are going to import ourselves some cost/benefit analysis and we are going to set this table, and EPA can't change it.

Now, if you tell me that when EPA changes it, EPA also has to take into account whether it's going to bring us back to the stone age, then... then it's a little less plausible that Congress should have, should have stepped in.

Mr. Warren: I think there's a common theme between these two portions of the argument.

On the first part that I'm arguing, I will give it to EPA that it's constrained by lead industry and this line of cases from doing what I think is required by the statute to do, but nonetheless it hasn't fought very hard to accomplish the aims that I'm talking about.

So when Congress gives it general direction, it doesn't seem to want to follow it.

And then when Congress gives it very specific direction, it doesn't want to follow it either, so that's what I think... that's the common theme here I think of an agency that wants to do what it wants to do, and not what Congress directed it to do.

I think that that's, that's the common--

Justice Breyer: Does the agency have the authority... you were saying what discretion they have.

They have wide discretion after they do this common-sense balancing of whatever things.

That was your view, right?

Do they also have the discretion not to do it?

Mr. Warren: --Not to do it.

No.

Justice Breyer: Not to take any of these things into account.

Mr. Warren: No.

And that's exactly--

Justice Breyer: Well, supposing that the EPA administrator thinks, you know, it's going to be a three-week hearing just to begin, and by the time I get finished reading all that stuff on the costs, etcetera, it's going to be another year and I'll never get this job done and I doubt that it has much to do with the outcome.

Is the EPA administrator then have the authority to say I don't want to do it, I don't want to get into this?

Mr. Warren: --No.

Justice Breyer: No.

Mr. Warren: Because the agency, what the agency doesn't have discretion to do, it's got a lot of discretion, and I have emphasized that these decisions are going to be reviewed, you know, under the scheme I'm talking about under the arbitrary and capricious test, but the one thing it doesn't have discretion to do is to take all those countervailing factors off the table because what that is doing, and this feeds right back into the delegation doctrine where they say they have to make no findings and so forth, as I alluded to, what that means is that the agency has the freedom to take us all the way down to deindustrialization, as the Court of Appeals said.

That can't be.

This Court's decisions at MCI, Benzene I think stands for the same proposition.

There has to be some common sense brought to bear.

There has to be some determination of what risks are acceptable, what risks are not.

Justice Scalia: No problem.

I mean, if EPA goes too far, it looks like things are going too far, Congress will step in and enact Part II with a fixed Table 1 that EPA can't depart from.

Mr. Warren: We don't need to... we don't need... the problem that I'm talking about, whether the standards make sense in terms of public health, whether they really help public health is not something Congress has ever, ever, ever addressed through oversight.

Never addressed that.

All it's done is extended some deadlines.

It's a completely different question because the question, and we're in the last mile.

I want to emphasize that.

This is not 1970.

This is 2000.

And we've been regulating these pollutants for years.

We've done lots and lots of things, and this issue of whether or not it's worth the candle in terms of public health is coming sharply into focus.

It's come sharp... much more sharply into focus as a result of things like the executive orders that have, have been in place for the last 20 years.

It's come more sharply into focus because of the Unfunded Mandate Act.

That's where we are today.

But this is something that Congress has never addressed, and can't fix.

Or can't fix without rewriting the statute, which it doesn't need to do because for the reasons I've talked about, Congress had it right in the first place.

It didn't pass the Senate bill to protect the health of persons.

It passed the House bill, which said protect public health, and public health had meaning, just as I'm outlining it here today, and that meaning, and I talked about this definition, but the name of that book is the... it's either the

"Cost of Sickness and the Price of Health. "

or the other way around.

I always get it confused.

But the point is is that in this century, the leaders of the public health tradition have been looking at these things, and for good reasons.

You know, you don't spend money foolishly and unwisely to achieve a pittance when you can use your money much more wisely and better to achieve more.

Justice O'Connor: Can you in one sentence tell me what standard it is you would say public health incorporates?

Mr. Warren: Yes.

Public health means--

Justice O'Connor: Because, I've listened to a lot of vague language.

Mr. Warren: --Yes.

Justice O'Connor: From you.

And I don't understand what it is that you are saying.

Mr. Warren: Well, okay.

Let me try this for you.

Public health contemplates a consideration of competing factors, including costs, in seeking to reduce population sickness and increase longevity.

I think that says it in a sentence, what I think I have borne out by that definition of public health.

When this act was passed, and today.

Justice Stevens: Do you think that standard were to comply with the delegation doctrine?

Mr. Warren: I do.

I do think it would comply with the delegation doctrine, and it's really, as I was saying to Justice Breyer, when you have countervailing factors, it's not adding factors, factors, factors, it is the fact that the factors countervail.

It's one against the other.

That narrows discretion and I gave the just and reasonable rates as an example, and I think if we had the analogous situation before us of a Court of Appeals that said in setting just and reasonable rates we're only going to look at the consumer interest, the logic would take us--

Justice O'Connor: Tell us, though, what it is in that sentence of yours that makes it meet the nondelegation standards, whereas the present provision does not, as interpreted by CASAC?

Mr. Warren: --As interpreted.

Because the difference between what I read and let me read it again.

Public health contemplates consideration of competing factors, including costs, in seeking to reduce population sickness and increase longevity.

What the lead industry's case does is it takes all of the first part of that sentence off the table.

It says you cannot consider those things.

And I don't frankly know how in a world of limited resources, whether it's air pollution or whether it's managed care, how we can make these decisions if we don't think about what risks are acceptable.

Chief Justice Rehnquist: But we've been living with lead industries for 20 years, I gather.

It was decided in 1980, wasn't it?

Mr. Warren: Yes, it was.

And two things on that.

One, there is no stare decisus effect.

Chief Justice Rehnquist: No.

But you say you don't know how we can live with this kind of a regime.

Well, we have lived with it for 20 years.

Mr. Warren: Well, I think that, that we... there's several things you can say about that.

I think we have not addressed the sort of last mile problems that we have here today.

I think when you say that we have lived with it, that does--

Chief Justice Rehnquist: You say the last mile.

That has a number of connotations.

Mr. Warren: --Right.

Chief Justice Rehnquist: What precisely are you talking about?

Mr. Warren: Well, what I mean, what I mean, Your Honor, okay, too much shorthand, but what I mean is that both ozone and particulate matter have been regulated very extensively for a number of years and take automobile emissions, for example, what we have done is we've, we're now, we are in the last 1 percent of control.

So the costs and the benefits, and the same could be true of utility scrubbers or a number of other things because we've done this kind of regulation, but let me say that--

Justice Breyer: Well, when you get down to that, at the last 1 percent or whatever, it is you're going to get into an area of fuzzy science.

You're going to find health effects on both sides as you're finding in this case apparently, and so therefore, if that's what you are worried about, you don't need your... you don't need more than the health balance, and if you are not talking about that, lead industry seems to have worked.

Mr. Warren: --Well, first of all, I think the health-health balance really won't work, taking particulate matter because I think you have the same problems.

It's just another form of a zero risk standard.

What you are doing is you are netting out any countervailing considerations, but there's really no place to stop until you have gone all the way down to zero for pollutants like this which are nonthreshold pollutants.

Let me continue.

Lead industries, as I indicated, I don't think on the facts was wrongly decided.

That was really--

Justice Stevens: Let me just interrupt you on that very one.

You said it has no stare decisus effect.

Of course, we have the authority to reject the case, and we're not bound by it.

Mr. Warren: --Right.

Justice Stevens: But doesn't it have stare decisus effect if the doctrine really has meaning in terms of the community and the agency and everything have relied on it for 20 years in planning their courses of action.

Isn't that what the heart of stare decisus is.

Mr. Warren: Right, but let me... I take the Central Bank of Denver case as probably the best one to talk about because this Court held no stare decisus effect and overturned a decision where 11 courts of appeals had come out the other way, and everybody had been living with aider and abettor liability under 10(b)(5) of the '34 Securities Act for decades, and yet this court said that's not what the statute said, so this Court is in a position to read the statute and make sense of the statute, as I am suggesting.

Now, I don't think lead industries really has worked.

That's not to say, and I'm not saying, although I don't know that the existing standards have benefits that exceed the costs.

I have a pretty good sense then in the first decade of the statute, there wasn't much question about that, that one of the reasons this thing didn't come sharply into focus in lead industries is because we were at the early stages and it made a lot of sense to do what was being done.

But at this stage, I don't think health-health tradeoffs really are the answer because for the very reason you're suggesting, the costs are important because the resources, and even in a rich society like this one, we do have limited resources and those resources can be better used elsewhere.

I mean, there is no even attempt to reconcile the ozone standard in the particulate matter and the other ambient standards in terms of providing a comparable degree of protection, even without any regard to costs.

For example, taking the Benzene case as an example, where you know, you had occupational carcinogens and could you look at the risks and could you at least make some comparison, you note none of that is even attempted in this case.

Justice Souter: I don't see why that makes for a make or break argument on the point of delegation, because there are health-health tradeoffs so that there are ways of drawing reasonable lines within the limited concepts of health, pro-health, anti-health.

If you introduce the economic factors at this stage of the analysis, what you will have done is to create a, or recognize, a new set of reasons, but it doesn't follow from that that for purposes of the delegation doctrine, it is impossible to draw a line short of zero which is not arbitrary if you don't consider the economics so that you complicate the analysis.

You may complicate the analysis in what is, a perfectly desirable way, but I don't see that it either makes or breaks the constitutionality of the statute under the delegation doctrine.

Mr. Warren: But, the first point is, you got to construe the statute.

And I think the statute has to be construed against the backdrop of the MCI Benzene--

Justice Souter: Right.

We may or may not--

Mr. Warren: --Okay.

Justice Souter: --agree on that.

But your, your other argument was that if you don't, I thought it was--

Mr. Warren: Right.

Justice Souter: --that if you don't import the economic consideration at this stage, there is no logical stopping place by which I think you mean there is no way to draw a line which is not inherently arbitrary or capricious.

And it seems to me that that is not a sound argument because even if you confine your countervailing considerations to health versus health, you will have kinds of reasons which would count as reasonable bases for drawing lines short of zero.

Mr. Warren: But Justice Souter, you are presupposing by the question I think that everything is like ozone.

Let's just take particulate matter and let's assume for a minute that there is no countervailing factors that there's risks all the way down to zero.

You had the same indeterminancy problem.

Let's take ozone, where there are going to be countervailing factors to some degree, but where you still have the same problem, where you are going... are you really protecting public health if you push it down to a level where the costs greatly exceed the benefits.

That's really what the regulatory impact analysis says here.

Let me make one more point.

Maybe I should reserve the balance.

I know I'm--

Argument of Seth P. Waxman

Chief Justice Rehnquist: Very well, Mr. Warren.

General Waxman, we'll hear from you.

Mr. Waxman: Mr. Chief Justice and may it please the court.

For 30 years, the EPA has consistently interpreted the Clean Air Act to require that NAAQS be set solely by reference to the effects of a pollutant's presence in the air.

Costs and other factors relating to removing the pollutant are accounted for under the statute in the process of implementing the standards.

That interpretation reflects the plain meaning of the statute and the intent uniformly expressed both by the D.C. Circuit and the legislative history of this technology-forcing act.

Justice O'Connor: Mr. Waxman, do you concede that EPA can consider countervailing health concerns, for example, the skin cancer problem?

Mr. Waxman: The EPA... we concede that the EPA can consider countervailing health concerns that derive from the presence of the pollutant in the air, for example, the health, the health cancer problem, but we do not concede, and the Court of Appeals has unanimously upheld our determination that we cannot consider any factors, economic or health, that don't derive from the presence of the pollutant in the ambient air because that's what Section 108(a)(2) requires.

Justice Breyer: But that is a little ambiguous, the presence of a certain degree of ozone in the air, according to DOT, is necessary to prevent melanoma.

Mr. Waxman: Yes.

Justice Breyer: And if you took it out, then there would be more melanoma, and you count that?

Mr. Waxman: We can--

Unknown Speaker: On the same theory, I guess you would have to say the stone age problem being that the presence of a certain amount of ozone is the air is necessary to prevent the kind of economic activity that would be associated with the stone age, and that health problem.

Mr. Waxman: --No.

We don't concede that.

Justice Breyer: I know you don't in your brief and I don't really see the difference.

Mr. Waxman: Here's the difference.

Justice Breyer: And I'm not sure it's important, it might be.

Mr. Waxman: I'm not sure it's important either, but if it might be, I'll address it.

The UVB question, that is the question about whether, well, this tropospheric ozone might be even at elevated levels that cause people to die might be protecting against skin cancer was a case of first impression for the EPA in this case.

It had never, there had never been such a claim made for any of the other six criteria pollutants in any of the five-year reviews.

The EPA's initial determination, which it defended in the Court of Appeals, was that it was not appropriate to consider that, but the Court of Appeals held otherwise, we have acquiesced and the EPA is in fact very well along in the process of evaluating and characterizing those countervailing health effects that derive from the presence of the pollutant in the air.

Justice Stevens: General Waxman, if we're permitted to ask unimportant questions, can I ask what eight hours we are talking about, in the eight hour standard?

Which eight hours of the day is it.

Mr. Waxman: It's... you're referring to the--

Justice Stevens: Ozone.

Mr. Waxman: --standard that is set for ozone.

Justice Stevens: Yes.

Mr. Waxman: And I don't think that the standard--

Justice Stevens: Because eight hours is more reliable than one hour, but I'm wondering if, I just don't find, you tell me, which eight hours is it?

Is it from midnight to 8 a.m., because--

Mr. Waxman: --I believe it is--

Justice Stevens: --Because it would vary, I think, tremendously.

Mr. Waxman: --I am certain that in either the criteria documents, the staff papers, the CASAC concurrence letters or the preamble, it specifies that in detail, but I'm afraid that I can't tell you the answer.

When CASAC... CASAC concurred unanimously that an eight-hour measuring period should be substituted for the one-hour period.

Justice Scalia: I had assumed that it meant you couldn't go over those levels during eight-hour period in the day.

Mr. Waxman: I believe that's right, but I am not a... I'm not even in the realm of being a scientist, and I... I would want to be more certain before I set it, but it's not, it's not just--

Justice Scalia: Just a matter of averaging it over the eight hours rather than averaging it for one hour.

Mr. Waxman: --It is in fact the three-year average of the annual fourth highest daily eight-hour average, if that's clear.

Justice Souter: General, can we go back... General, can we go back to your answer from which we're sort of departing.

You were at the point of saying... you had said, that economics can be considered at the implementation stage.

Mr. Waxman: Yes.

Justice Souter: Can economics be considered at that stage for any purpose other than deciding what period of time will be allowed for complete implementation?

Mr. Waxman: Yes.

Both by the agency--

Justice Souter: Explain how that works.

Mr. Waxman: --Okay first of all, costs are... the statute requires the EPA to do a risk assessment analysis which was referred to earlier, and that be provided to the states and Congress, and Congress routinely reviews this to determine whether to adjust the enforcement burdens that the statute applies.

Justice Souter: Can EPA itself make such a decision?

Mr. Waxman: Yes, it can, in the following respects.

First, if a state fails to create a SIP, a state implementation plan, EPA must do it and in doing its own implementation plan for one of the 3,000 areas in the country, it must reference all of that data, as if it were a state.

Secondly--

Justice Souter: Okay.

Mr. Waxman: --I have a whole list.

Justice Souter: Go ahead.

Go ahead.

Mr. Waxman: Which I hope will answer your question.

Leaving aside question of postponement of the dates and extensions of time, the EPA must use that data to determine what control technique guidelines will be imposed with respect to ozone in particular.

It must use that data in determining what requirements to place on light duty truck emissions.

It also must use that data to set performance standards for new stationary sources of air pollution and for new motor vehicles.

The theme here is, as I said before, we have in essence a two-part statute.

Part one is set the standard.

And part two is implementation, which also imposes lots of regulatory obligations on EPA itself.

Justice Souter: Can EPA ever make this decision?

Over any conceivable period of time.

It simply will be economically undesirable to exact the cost of meeting this standard, therefore, we will not require this standard to be met.

We will require, say, nothing more than compliance with this standard discounted by 40 percent.

Mr. Waxman: No.

Justice Souter: Can it make that judgment?

Mr. Waxman: It may not make that judgment, and the reason is, as you suggested in I believe in an earlier question that that judgment was specifically and expressly left to Congress.

The Senate report which accompanied promulgation of the 1970 act, at pages 2 and 3 and 10 expressly reflect Congress' judgment that that determination is to be left for Congress upon reviewing a technology-forcing statute in which costs will not be considered.

Justice Souter: I wanted to know whether I got it right, but you are telling me--

Mr. Waxman: Yes.

Justice Souter: --You are telling me that yes--

Mr. Waxman: Yes.

They cannot... EPA can--

Justice Scalia: --I wasn't aware, I wasn't aware that they could extend the time beyond, beyond what Congress has prescribed.

Mr. Waxman: --They can't.

Congress has provided, for example, with respect to attainment of the standard under a state implementation program that attainment must be achieved within five years, but EPA can extend it for another five years and then give two additional one-year extensions, all by referencing questions of costs, feasibility, etcetera.

The EPA... I want to address the legislative history in a moment because the history both before and after the 1970 acts is very revealing here.

Justice Kennedy: Is the... is the congressional scheme for Congress to revisit this if it chooses, is that necessary to save this from unlawful delegation?

Mr. Waxman: No.

I don't think so at all.

The first thing that Congress did after it passed the '70 act was to provide in 1977 that the standards should be reviewed and revised every five years.

Now, that is a provision that is codified in Section 109(d).

It's a new provision, and it's significant because what it says is that the revisions shall be made in the same manner as the original standards are set, by reference to the criteria documents and Section 109(b).

Now, I think that one of the things one can glean, one of the many things one can glean from the legislative history, is that when Congress did that in 1977, it knew repeatedly without any doubt and from a commission that it itself asked to look at this question, that the EPA was setting the standards without reference to costs or other implementation factors, and yet, it required the EPA to revise the standards every five years and expressly said that they are to do so in the same manner as which the original standards are set.

There was, in particular, a 1970 Congressional Research Service Report, 1975, Congressional Research Service Report that was asked to look at this question, and outlined the debate over whether to retain the effects of the pollutants as the sole criteria of standard setting, and Congress did that in 1977.

But it went further, Justice Kennedy.

It also directed that another commission, an independent commission, be established to look at this question, and that commission reported to Congress in 1981, and it said,

"the current statutory criteria and requirements for setting air quality standards at the levels necessary to protect public health without considering economic factors should remain unchanged. "

And when Congress revised the statute in 1990, that's exactly what it did.

And both the House and the Senate reports accompanying the 1990 legislation said that primary NAAQS are

"set at a level that protects the public health with an adequate margin of safety without regard to the economic or technical feasibility of attainment. "

This Court itself said in the Union Electric case, construing the Clean Air Act, and I'm quoting,

"when Congress intended the administrator to be concerned about economic or technological feasibility, it has expressly so provided. "

And in the Benzene case, which my opponent has cited but which I think strongly supports us, the Court said, and I am quoting,

"when Congress has intended that an agency engage in cost/benefit analysis, it has clearly indicated such intent on the face of the statute. "

Now there, this Court determined that before OSHA could lower the level for a particular toxic material or hazard physical agent below an existing standard, it had to determine that there was a significant risk to safety.

And that determination was to be made without reference to cost/benefit analysis, and if I can just say one thing with respect to the previous argument, that standard, significant risk to safety, has no more countervailing extraneous factors imported into it than the public health adequate margin of safety requisite standard that exists here.

In fact, this Court went on at length to say that it doesn't require mathematical precision and there will be a range of factors and that judgment has to be rendered and that the court will simply have to review whether the decision is arbitrary or capricious.

Justice Breyer: So what happens if it turns out because of science that the internal combustion engine does always affect somebody and so that having cars will have some adverse health effects, but what is the EPA supposed to do?

Mr. Waxman: Well, the EPA reasonably interprets the Clean Air Act as not either requiring or permitting it to set levels that are at or below background levels, and it has never yet, I mean, you know, science inexorably creeps forward, but the EPA has never set, found a level necessary, for example, to eliminate the internal combustion engine.

In fact, with respect to ozone, the first time the EPA changed the standard, it changed the standard from a.08 one-hour standard, which is much stricter than what we have here, to a.12 one-hour standard.

That is, it relaxed it and of course, it was, this goes to Justice Scalia's question from a while ago, it relaxed it and of course the American Lung Association and others came running in and saying that's ridiculous.

You know, how can you be relaxing the standard?

Health effects could occur.

And you know I commend the D.C. Circuit's opinion, in, it's called American Petroleum Institute vs. Kostill for an analysis of why there are, in fact, countervailing factors that would permit an administrator exercising judgment within the zone of reasonableness to raise the standard.

Now, I want to say something about your, your earlier question about what if the costs were so astronomical to require us to deindustrialize, although deindustrialization would be quite unhealthy, and was quite unhealthy.

I want to say two things.

First of all, Congress has made a rational decision that with respect to what it viewed and characterized as the most serious problem facing America in 1970, which was air pollution, that it wanted to create an agency, an expert agency that would rely on science and the latest scientific knowledge to do as step one, just tell us.

We recognize this is going to be hard.

We recognize that some of these chemicals are "nonthreshold", but tell us, based on your best judgment what level would be safe to set for the whole country.

And then, establishes a program for how to achieve the levels by balancing the burdens between cars and stationary sources of pollution.

But secondly, the EPA was... the EPA has always done cost estimates at the time that it promulgates the criteria documents so that the states can use them in implementing.

And retrospective... looking retrospectively, every single one of those cost estimates has vastly overstated the actual cost/benefit analysis of what it took to meet that level.

Justice O'Connor: What is there, though... what is there, though, that would suggest that EPA could not decide that with electric motor vehicles we could achieve a better standard and it would be better for health and therefore, we are going to set a much lower standard?

Mr. Waxman: Well, Justice O'Connor, the reason is that when it sets the standard, it is... and this is, I'm making reference to the language of Sections 108 and 109 of the act, which are reprinted at pages 109-A through 112-A of the appendix to our petition.

They're in several other places.

The standards must be set, it says this in 109, based on the criteria.

And in 108(a)(2), it says that the criteria shall accurately reflect the latest scientific knowledge useful in indicating the kind and extent of all identifiable effects on public health or welfare which may be expected from the presence of such pollutant in the ambient air, so that does not look at--

Justice Breyer: You left out three words.

Mr. Waxman: --so that does not look at... it does... when it sets the standard, should it be.08 or.09 or 3.5, when it sets the standard, it does not look at, are there electric cars or not electric cars or are there scrubbers for SO2 emissions or not?

It sets the standard at what is requisite to protect public health from the effects of that ubiquitous pollutant, but once those standards are set, it is then up to the states and EPA to determine one, what areas within our jurisdictions don't meet those general standards, and then--

Justice O'Connor: I understand.

That's what have you been saying all along, but a few minutes ago, you seemed to be trying to reassure that well, I mean, EPA understands we have automobiles and they're not going to set something that means there's no more automobile use in the country.

And yet, what you have just said again would indicate that's not a consideration in setting the standards.

Mr. Waxman: --It's not a consideration in setting the standards, and the point that I wanted to make.

I didn't successfully make it.

Is that time and again with respect to each one of these standards, there have been complaints that this would require 10 horrible things.

With respect to the original standards, which then authorize the EPA to set tailpipe emissions for new cars.

This is discussed extensively in some of the amicus briefs.

The automobile industry stated publicly that it was impossible to meet those standards, and if it were possible, the companies would go bankrupt.

As it turns out, the standard... the companies did develop the technology.

They met the standards well ahead of the schedule that EPA and Congress had revised and as a result with respect to all six of the criteria pollutants, the health in this country is vastly better now than it was in 1970, even though we have a much bigger population and we have a much greater level of industrialization.

Justice O'Connor: But it would probably be even better if we set it at zero.

Mr. Waxman: Well, I don't think... well, this is a--

Justice O'Connor: I would have thought the health would be a lot better if we just said no pollutants.

Mr. Waxman: --Well, Justice O'Connor, that would be a question for Congress because everybody understands and Congress has said that it does not expect or allow the EPA to regulate to zero biological risk.

It regulates to a--

Justice O'Connor: The statute doesn't say that, does it?

Mr. Waxman: --It does.

It does.

With respect.

It says that standards must be set at levels that are requisite, that is necessary, but not more than necessary to protect against, not all effects, but public health effects arising from the presence of the pollutant in the air, which the agency and the courts, supported by the legislative history, interpret as meaning effects that are of medical significance that affect a sufficiently significant proportion of the population that the administrator in her judgment can conclude reasonably that it constitutes a public health effect.

Now--

Justice Souter: Are you saying... I think you're saying you'd never get to zero because there is no reason to believe that you would have to get to zero to end what are understood to be treatable diseases or treatable effects?

Mr. Waxman: Treatability is a... is one of the factors that goes... that builds into the accepted medical profession's definition of what constitutes an adverse health effect.

But it would also... may I just finish the answer?

It would also never be required because the EPA, the statute, this is not a statute that requires or permits the EPA to take our society to zero, to take our society below what otherwise occurs in the air without all of this man-made pollution-inducing activity.

I'm sorry.

Justice Breyer: The reason that I ask, it says the presence of such pollution in the ambient air in varying quantities.

In varying quantities.

So I thought, given that word, that there is no effect that the EPA administrator can't take into account if that effect is a public health effect, and is different at different quantities.

Mr. Waxman: That is correct.

She is--

Justice Breyer: All right.

If that is correct, then mightn't it be factually true, I mean, that if you were going to electric cars, or you're really going to change the whole economy, the chances of the costs being so fantastic that they have serious adverse health effects are fairly high, and the saving might be fairly low in terms of health.

Maybe that isn't so.

Mr. Waxman: --I don't know whether or not it's possible or not, Justice Breyer, but I will say this.

In 30 years under this act, and this act is... this act is the premiere example of the point that Justice Kennedy was expressing for the Court in Loving of cooperation between two different branches under the separation, under the permissible separation of powers to achieve a result.

Congress has over and over and over again adjusted implementation issues in response to problems of cost and feasibility, but never, it has never done either of the following two things.

It has never changed a NAAQS.

Never said no, that's too low, we'll have to deindustrialize, and it has never changed the factors that EPA considers and doesn't consider in setting NAAQS.

Justice Kennedy: Have there been, have there been other cases in other regulatory statutes where the government has argued that it survives a delegation challenge because there is a cost/benefit analysis... i.e. have you taken a position, in other cases, in other agencies, cases where cost/benefit is a way to save the statute from the delegation session.

Mr. Waxman: Not that I'm aware of, although in some of the rate-making cases, I think it was probably apparent from the context.

I mean, my colleague cites Hope Natural Gas, which was not a nondelegation case, but it was apparent from the context.

But I think the interesting point, Justice Kennedy, is that this Court has decided many cases in which it is clear that it was neither necessary nor important.

Benzene is the best possible example of that.

But it is also true in other cases.

I mean, if one can go all the way back to--

Justice Scalia: Excuse me.

What was neither necessary, nor important?

Mr. Waxman: --A cost/benefit analysis in determining in either making the statute constitutional under the nondelegation doctrine, or providing a sufficient principle for determining what is a significant safety risk.

But the other case that just comes to mind is, in many ways... the first nondelegation case of the last century, the Stranahan case, Buttfield vs. Stranahan in which Congress passed a law that told the Secretary of the Treasury for some reason to set uniform rates for the quality of tea and to prohibit the importation of any tea that did not meet those standards.

Now, there's no indication in the record in the case that cost/benefit analysis went into the determination of what an appropriate standard for tea quality was, and it's frankly hard to imagine how it would have been done so.

In my few remaining minutes, I would like to address my comments to the argument that somehow the words public health requires this Court, notwithstanding 20 years of D.C. Circuit precedent to the contrary, to require some form of cost/benefit analysis.

And I have five points to make with respect to that in my remaining time.

First of all, the legislative history, the 1970 legislative history reflects that Congress intended the plain meaning of public health to mean to protect populations, not the most sensitive person as is the case in the OSHA Benzene context.

Number two, if you look at Section 108(a) of the act, which determines what criteria are, it is the effects on public health of the presence of the pollutant in the air that is being ascertained and costs does not make sense in that context.

There are also, as Justice Scalia pointed out, many provisions of the Clean Air Act that require consideration of both costs and public health, and they are collected in the brief of Massachusetts and New Jersey at page 29.

Well... penultimately, the Winslow definition, the 1951 definition that ATA cites is a definition of the profession of public health, the discipline of public health.

There is no showing in this record or in the legislative history that that case, that that definition was ever even cited in... by 1970, much less brought to the attention of Congress.

And there is no showing whatsoever in the legislative history that that definition was interpreted that way before 1970.

I mean, it would require Section 109(b) to say that NAAQS must be set at the level requisite to protect the profession of public health with an adequate margin of safety.

And in fact, there is a reference to the fact that all public health organizations agree can you only determine this with respect to costs, at page 36, footnote 27 of our principle brief on this appeal, we reference and describe the expressed views of the American Public Health Association which is the national umbrella organization for public health professionals, which specifically has endorsed the process that EPA uses for setting the NAAQS standard.

In short, there is nothing in Section 108 or 109 that permits EPA to set a level inadequate to protect the public health because of the costs of compliance.

If there are no further questions.

Rebuttal of Edward W. Warren

Chief Justice Rehnquist: Thank you, General Waxman.

Mr. Warren, have you one minute remaining.

Mr. Warren: Your Honors, the cotton dust case, which did construe Section 38, said that cost/benefit analysis either permitted or required by section 38 of that statute, it was ruled out only because the statute provided a feasibility analysis.

That's the only thing that ruled it out.

The examples that Mr. Waxman, or General Waxman gave are all feasibility examples.

He concedes that the standard itself cannot be changed after it is set, and lastly, we have acted as if this provision has made sense in the D.C. Circuit.

I call the Court's attention to the American Lung Association case, which shows that this interpretation of the statute makes no sense from any perspective.

That was a case where the agency refused to regulate sulfur oxides.

Lastly, I would call to the Court's attention the State of Michigan state as an example where there was--

Mr. Speaker: The opinions of the Court in two cases will be announced by Justice Scalia.

Argument of Justice Scalia

Mr. Scalia: The first of these was actually two consolidated cases, No. 99-1257, Whitman versus American Trucking Associations, and No. 99-1426, American Trucking Associations versus Whitman.

These cases come to us on writ of certiorari to the United States Court of Appeals for the District of Columbia Circuit.

Section 109 of the Clean Air Act requires petitioner, the administrator of the Environmental Protection Agency to promulgate and periodically to revise as necessary, National Ambient Air Quality Standards for each pollutant for which air quality criteria have been issued under Section 108 of the Act.

These cases arose when in 1997, petitioner revised the ozone and particulate matter standards, and respondents in No. 99-1257 challenged the revised standards on several grounds.

The DC Circuit accepted some of the challenges and rejected others.

It held that Section 109(b)(1) as interpreted by the administrator delegated legislative power to the administrator in contravention of the Federal Constitution.

It held further that the EPA may not consider the costs of implementing an air quality standard when deciding the level at which to set the standard, and finally the court held that, although certain implementation provisions for the ozone standards contained in subpart 2 of the Clean Air Acts part regarding nonattainment areas did not prevent the EPA from revising the ozone standard.

Nonetheless those provisions rather than more general provisions contained in subpart 1 of that part, constrained the implementation of the new ozone standards.

The court rejected the argument that it lacked jurisdiction to reach the implementation question because there had been no final implementation action.

We affirm in part and reverse in part.

First, we hold that Section 109(b) does not permit the Administrator to consider implementation costs in setting air quality standards.

Section 109(b)(1) instructs the EPA to set air quality standards “the attainment and maintenance of which are requisite to protect the public health with an adequate margin of safety.”

Implementation costs are not expressly included in that equation and we will not infer a provision for costs, from ambiguous terms such as requisite and adequate margin.

Section 109(b)(1) is the engine that drives nearly all of Title I of the CAA and Congress does not alter a regulatory scheme’s fundamental details in vague terms or ancillary provisions.

Moreover, the CAA often expressly grants the EPA authority to consider implementation costs and such costs are both so indirectly related to the public health and so full of potential for cancelling the conclusions drawn from direct health effects that they would have been expressly mentioned in Section 109, had Congress meant them to be considered.

Other CAA provisions, which do require cost data to be generated or considered, have no bearing upon whether costs are to be taken account of in setting the standards.

So, because the text of 109(b)(1) in its context is clear, we have no cause to apply the canon of construing taxes to avoid serious constitutional problems.

Second, if you have gotten all of that we hold that Section 109(b)(1) does not delegate legislative power to the EPA.

When Congress confers decision making authority upon agencies it must lay down our cases say an intelligible principle to which the person or body authorized to act is directed to confirm.

This is peculiarly a task for Congress.

An agency cannot cure an unlawful delegation of legislative power by adopting in its discretion a limiting construction of the statute.

Section 109(b)(1) requires the administrator to set air quality standards at a level that is neither greater nor less than that which is required to protect the public health from the adverse effects of the pollutant in the ambient air.

The limits that 109(b)(1) thus imposes on the EPA’s discretion are strikingly similar to the limits we approved in our recent decision in Touby v United States and the scope of discretion that 109(b)(1) allows is well within the outer limits of our nondelegation precedents.

Contrary to respondent’s argument, statutes need not provide a determinate criterion for saying, how much of a regulated harm is too much to avoid delegating legislative power.

Third, we find that the Court of Appeals had jurisdiction under Section 307 of the Clean Air Act to consider the implementation issue involving subparts 1 and 2.

The implementation policy constitutes final agency action under Section 307 because it marked the consummation of the EPA’s decision making process, and the policy is right for review because the question it presents is purely one of statutory interpretation that would not benefit from further factual development.

Review will not interfere with further administrative development and the hardship on respondent States in developing state implementation plans satisfies the CAA’s special judicial review provision permitting pre enforcement review.

Beyond all this, we find that the implementation issue was fairly included within the challenges to the final ozone rule that were before the Court of Appeals and all parties agreed that that rule is final agency action ripe for review.

Finally, we hold that the EPA’s implementation policy is unlawful.

The statutory issue is which of the CAA’s implementation provisions for nonattainment areas applies to the revised ozone standards, Subpart 1 or Subpart 2. Under our chevron decision if the statute resolves the issue, we of course must follow the statute, but if the statute is ambiguous we must defer to a reasonable agency interpretation of the ambiguity.

Here the statute is ambiguous, concerning the interaction between subpart 1 and subpart 2, but we do not defer to the EPA’s interpretation because it is unreasonable.

The principle distinction between the subparts is that subpart 2 eliminates regulatory discretion allowed by subpart 1, yet the EPA’s interpretation would render subpart 2’s carefully designed restrictions on EPA discretion nugatory, once the new ozone National Air Ambient Quality Standard, NAAQS has been promulgated.

An agency may not construe a statute in a way that completely nullifies textually applicable provisions meant to limit its discretion.

In addition, although Subpart 2 was obviously written to govern implementation for sometime into the future, nothing in the EPA’s interpretation would have prevented the agency from aborting the subpart the day after it was enacted.

We therefore, find the interpretation unlawful.

We leave to the EPA the task of developing a reasonable interpretation of the two subparts.

Justice Thomas has filed a concurring opinion; Justice Stevens has filed an opinion concurring in part and concurring in the judgment in which Justice Souter has joined; Justice Breyer has filed an opinion concurring in part and concurring in the judgment.